Broker issues Tobin tax threat

LONDON-BASED broking giant Icap will quit the European Union if a Tobin tax on financial transactions is introduced, its chief executive has said.

Michael Spencer, a former Conservative Party treasurer, told the Independent on Sunday that such a levy would “destroy the City”. This is the first such threat made by the company, despite threats from other businesses to move because of the 50p personal tax rate. The business currently employs around 1,800 people in the UK and 4,500 worldwide.

Spenser said: “This tax would destroy the City and cost the Exchequer billions, but it would benefit Brussels. Companies like Icap will simply move elsewhere outside the EU if [French president] Nicolas Sarkozy and [German chancellor] Angela Merkel push ahead with this silly tax.”

The tax is a “cynical threat” by Sarkozy to hit London’s foreign exchange, equities, commodities and derivatives markets, Spenser added. “It would also be a huge fillip to New York and other centres like Singapore. It could only work if adopted globally.”

The plans are set to be tabled at an EU meeting in September. The UK and the Netherlands are said to be opposed to the plans.